The Long View

Government as Bad Venture Capitalist

Since the days of the Erie Railway, political meddling has been a recipe for disaster and squandered dollars.

When Solyndra filed for bankruptcy last summer, the solar-panel manufacturer left U.S. taxpayers on the hook for a loan of $535 million that the government had guaranteed (and even subordinated to fresh private credit as the company's troubles worsened). In retrospect, it's clear that the motive behind the loan guarantee was basically political: to foster green energy regardless of its economic merit.

That's always the problem with government investment: Politicians make political decisions, not economic ones. Thus history...